Exhibit 20A-2 Macro AD/AS Models

question 31

Multiple Choice

Exhibit 20A-2 Macro AD/AS Models

-In Panel (a) of Exhibit 20A-2,the economy is initially in short-run equilibrium at real GDP level Y₁ and price level P₂.Classical theory argues that:

• A) SRAS will shift to leftward and establish full employment at P₃Yp without government intervention.
• B) higher wages will result in a leftward shift of SRAS.
• C) long-run equilibrium will be established at Yp and P₁.
• D) all of the above will take place.

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Definitions:

Predictability

The ability to accurately forecast future events or behaviors based on current knowledge or analysis.

Mischel's Critique

Refers to psychologist Walter Mischel's argument against the consistency of personality traits, suggesting situational variables play a significant role in behavior.

Personality Variables

Characteristics or factors that can vary among individuals and contribute to differences in behavior and personality.

Personality Traits

Enduring characteristics or qualities that define an individual's behavior in various situations.